Record first-half results for The Co-operative Group
24 September 2008
Interim Results for The Co-operative Group for the 28 weeks ended 26th July 2008
The Co-operative Group is the UK’s largest mutual retailer. It is the fifth largest food retailer, the third largest retail pharmacy chain, the number one provider of funeral services and the largest independent travel business. It also has strong market positions in banking and insurance. The Group employs 85,000 people, has 3 million members and more than 4,300 retail outlets. As well as delivering on its financial and operational goals, The Co-operative Group aims to deliver on its social goals, playing an active part supporting local communities and the wider world. Today the Group is reporting on both of these areas.
Trading Group Highlights
- Trading Group sales up 34 per cent to £4.02bn (£2.99bn)
- Trading Group operating profits up 35.6 per cent at £191.1m, an increase of £50.2m* - driven by strong performance from the Group’s food business
- Food business saw sales rise 43.5 per cent to £2.4bn driven by store refits and range expansions. Like-for-like first half sales rose by 5 per cent, against a total market increase of 4.6 per cent. Trading profit was up 67.7 per cent at £126m
- Proposed £1.565bn acquisition of Somerfield building on last year’s merger of The Co-operative Group and United Co-operatives which created the world’s largest consumer co-operative
- Continued progress on three-year plan to invest to improve the Group and transform our retail estate under a single unified brand
- 926 retail outlets converted to the new brand concept as part of a £100m investment in the first half
- On track to hit target to double profits in three years
- Dividend payments to members more than doubled, up from £45.6m to £94.7m
- Membership of The Co-operative Group now over 3m
* Operating profit before significant items, changes in the valuation of investment properties and fixed asset disposals
Financial and Operational Performance
- Group sales net of VAT and before premiums ceded to reinsurers rose 25 per cent to £5.08bn (£4.06bn)
- Consolidated Group operating profit before significant items rose 41 per cent to £256m (£181.5m)
- Profit before payments to and on behalf of members (the equivalent of pre-tax profits in a plc) rose 60.5 per cent to £197.6m (£123.1m)
- Trading Group net debt fell from £563m to £538m
- Innovative eco-town proposal through to next phase of Government shortlisting process
- Review of governance structures on-going
- The Group raised £2.9m for our charities of the year – The Children’s Society and Diabetes UK
- The Food business was named “Green Retailer of the Year” at The Grocer Gold Awards, beating Asda, Ocado, Sainsbury’s and Tesco
- We launched The Co-operative Food Ethical Policy, the world’s largest consumer poll on ethics
- We opened Waste Works, the Group’s education centre designed to give school children a hands-on approach to reducing waste and sustainable living
- We are the first UK business to invite consumer members to help determine our community and campaigns activity
Peter Marks, Chief Executive, said:
“This has been an exciting half year for the Co-operative Group as our rejuvenated food business led a strong performance by the Trading Group.
“In the wake of the merger of The Co-operative Group and United Co-operatives, we have made record profits. At the same time, we have secured agreement to buy Somerfield – a transformational deal which will cement out position as the UK’s premier community retailer.
“These results show that we are continuing to make huge strides within the Trading Group, in spite of all the changes going on in the business.
“I am delighted that we are continuing the process of reinvigorating our business which will lead to a renaissance of the whole co-operative sector in the UK.
“Looking ahead, it is clear that the rest of this year and quite possibly much of next year will be tough, because of the wider economic environment. The credit crunch, the ongoing slow-down in the housing market, food price inflation and energy cost rises will weigh on all businesses – and our sector will continue to be as competitive as ever.
“In spite of this, we are confident that our business model is robust and we will continue to maximise opportunities as and where they present themselves, while at the same time keeping a firm hand on cost contro land delivering a competitive
offer to our customers.”
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